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First Party Fraud: When the Customer Is NOT Always Right

Guest Blog By Adam Elliott

Recent data breaches are front-and-center in the public consciousness, with retailers and banks scrambling to provide answers and customers worried about the safety and security of their accounts and identities.

However, while high profile breaches serve to raise consumer awareness, as well as retailer responsiveness, some consumers are using both reactions to perpetrate more fraud. With such widespread publicity, it is likely that thousands of fraudsters with no connection to the original data breach may take notice and exploit retailer’s willingness to remediate the situation.

This type of fraud – known as “first party fraud” – happens when someone uses a verified identity to enter a transaction or account application with malicious intent. In a new loan application situation, the fraudster will apply for a loan with no intent of payment. In a charge-off scenario, the perpetrator will purchase merchandise, and then dispute the charge later so the full amount will be refunded – even though they did, in fact, make the transaction.

With businesses scrambling to repair customer relationships following such large and heavily publicized data breaches, first party fraudsters know that retailers will be handling an increased number of disputed charges and issuing thousands of refunds for fraudulent transactions. These customers believe they can exploit the situation and dispute purchases they have actually made, while falsely attributing the charges to the data breach.

First party fraud has always been a significant contributor to retailer losses, but the current situation is even more disastrous than past spikes in similar fraud. For many reasons, this seems to be “open season” for first party fraudsters, with national merchants in full crisis mode immediately following the holidays. Reputation management and customer preservation is making retailers more apt to charge back transactions simply because they cannot fully determine whether they were legitimate or fraudulent.

We are already seeing a significant rise in first party fraud that is adding to the already calamitous breach situation, and with merchants so fixated on controls to mitigate and remedy the damage caused from the actual breach, they will likely be hit hard with this type of fraud.

Given any of the aforementioned circumstances – the holiday season, a highly public breach, and a consumer base furiously scouring their bank statements for irregularities – a certain degree of fraud may be inevitable. However, taken together, this situation is almost unprecedented and has no simple solution.

What retailers and financial institutions must determine is the balance between heightened sensitivity to customer needs, and the potential for abuse among dishonest consumers.

Adam Elliott is President of ID Insight

The Store is a Big Focus for Retail Technology in 2014

Guest Blog By Steve Jeffery

A new year always presents the opportunity to take stock of where an industry is headed, and NRF’s Big Show in January certainly gives those of us in the retail technology space a leg up in understanding what retailers are thinking about, talking about and planning for in the year ahead. After a very busy week and many great conversations with senior retail executives, store managers, IT innovators, partners and more, it’s exciting to get back to work with tangible feedback about what retailers are challenged by, and what they are energized by, as the ways in which today’s consumers spend their dollars continue to evolve. Here are some of the key trends and themes that resonated:

  • A growing interest in in-store technologies

As online shopping continues to put pressure on brick and mortar sales, it was interesting to see that a lot of people were talking about the importance of in-store technologies, and the in-store experience specifically. This makes sense – online merchants are pretty sophisticated about using data analytics technologies to improve and personalize the shopping experience for their customers, and brick and mortar retailers will need to step up their in-store analytics to do the same. I was especially struck by a line from a presentation given by Jack Dorsey, CEO of Square and Chairman of Twitter: “Going back to physical places, there’s a real asset in having physical space. What technology can do is make that more efficient to connect a customer to a product or service, but it all ends up in a physical space.” Retailers want and need technologies that can help them optimize their assets, whether virtual or brick and mortar. And since the vast majority of all purchases (92 percent according to Gartner) still happen in physical stores, it’s exciting to see more and more retailers recognizing the importance of in-store solutions.

  • Shift from “behind the scenes” to customer facing technologies

This really was the year of the consumer at NRF, as the focus was squarely on technologies that can be engaged to improve the customer experience, with less emphasis on solutions for inventory and supply chain management. I think there are a couple of reasons for this. First, retailers have already recognized the vital importance of back-end supply chain technologies and made investments. This gives them the opportunity to now direct more resources toward improving customer-facing operations. Second, as online channels are wooing consumers with everything from vast product selections to free shipping, the role of the store is changing, making the customer experience more important than ever. When the competition is just a mouse click away, brick and mortar stores need to be doing everything they can to understand the drivers behind in-store purchasing and on improving the variables (whether it’s register wait times, personal service, displays, etc.) that can help convert more store visitors into buyers.

  • Retail data and what to do with it

Through numerous technical innovations, the amount and variety of data that can now be collected in the store is growing by leaps and bounds. But the real value lies in transforming this data into insight that drives specific actions for improving retail performance. My sense from NRF is that retailers are still feeling their way here, and are really looking for guidance in terms of how to most effectively analyze, integrate and use the data that they are able to capture, both in-store and online. Some of the issues they are thinking about include storage, data privacy, timing and how to separate information that’s important from information that’s just “noise.” Technology vendors that focus on finding ways to help retailers navigate in this landscape will be one step ahead.

  • Desire for single-platform data analytics solution

Is there a “killer app” for retail analytics? In my discussion with retailers at NRF, the question of “the next big thing” seemed less important than finding the “most useful and practical thing.” They are attracted to platforms that can do multiple types of analysis and leverage multiple types of data, including in-store traffic data, behavior data, security data, data from back end systems and more. In an environment where so many businesses need to find ways to do more with less, a multi-purpose solution that can be used to address several areas of focus is an attractive proposition.

As always, The Big Show was a great learning experience. Now comes the fun part – applying the lessons learned to winning innovation in the months ahead.

Steve Jeffery is CEO of Brickstream

How Technology Is Changing The POP Display Industry

Guest Blog by Matthew Brennan

There are certain things about your trade show POP display that always remain the same. For instance, having a stellar looking display to catch people’s attention is as important as ever. It’s a staple in making sure to attract and retain customers in a crowded, competitive environment.

That means that you need to make sure that things are perfect, and have a tool kit with you that includes things such as hammers, screwdrivers, and strong tape, like professional tape from companies like Essentra.

However, technology is changing the way POP displays are run. From the planning and conceptual stages, down to the displays at your booth, it may be time to take a look at some of the technologies available to you in order to enhance the experience for your customers.

Smart Phones – There are countless ways you can use smart phones to enhance the POP display experience. If you’re planning a trade show, there’s an app for that. Trade show apps can help you plan, as well as promote your event. These apps can also help your attendees plan their day. Smart phones can also be used for email or text promotion. You can even attach a card reader so that you can accept credit card transactions right there on the spot. Make sure that you’re getting the most out of your smart phone while planning your next POP display.

Interactive Exhibits – It’s no longer enough to invite your customers in and have them sit through your boring sales pitch. Display booths with more interactivity do better. This can be some kind of 3D interactivity, or simply giving your attendees access to information that is available at the touch of a button. That way your customers have control over what information that they are seeking from the experience, and will stay more engaged. Tablets or other mobile devices can be used to provide this type of information quickly. Make sure that your customers still have the chance to interact with people, however. You want to make sure to give them that personal touch.

Social Media – Facebook, Twitter and other social platforms are a great way to get the word out about your trade show event. They can help you give people a taste of exactly what they should expect by attending your event. Make sure that you are using them to stir industry interest and pull people in. Nothing replaces the human touch of the live event, but social is a marvelous tool for increasing your audience, improving business relationships, and getting you in front of the people that you should know. You can also use your social accounts to pump the “hi-tech” aspects of your interactive trade show booth.

Measuring Data – Just about every aspect of your POP display or trade show can be measured. The number of people who visited your booth, down to the number of sales all can help determine whether your efforts where worth it, or what adjustments to your strategy need to be made. Make sure that you are keeping track of the important data so that your efforts are not in vain.

Conclusion

Having the latest technology at a trade show or corporate event is a great way to differentiate your POP display from the competition, and leave a mark with your customers. While technology is supposed to make our lives easier, it doesn’t always work the way we’d like it to, however.

Make sure that if you’re using a card reader with your smart phone, that you also have an old fashioned card machine, and your receipt book. Make sure that if your displays are interactive, that people have the option of accessing the same information in offline or paper formats.

While a large percentage of the population is adopting, not everyone may prefer the high-tech methods.

That being said, make sure that you are doing everything you can to create a memorable experience. Selling at a competitive environment such as a trade show or corporate event can require a lot of planning and coordinating. It requires being prepared, and being willing to do everything that you can to differentiate yourself from other businesses.

Make sure that your business is doing all it can to stay on top of current trends, and create the best possible POP display experience for your customers. That means keeping up with all the changes in technology, and how they impact your audience.

Matthew Brennan is a marketing writer based in the Chicago area. He regularly writes about content marketing, blogging, and engaging with your audience. He has been published on ProBlogger, Soshable, and Business2Community. Connect with Matthew on his website, www.matthewlbrennan.com, LinkedIn, Twitter, Google+